Trump won't reveal his taxes, so Congress should change the way presidents report their finances

Trump won't reveal his taxes, so Congress should change the way presidents report their finances
President Donald Trump on March 13 in the Roosevelt Room of the White House in Washington. (Pablo Martinez Monsivais / AP)

The House Committee on Oversight and Government Reform held a hearing on government transparency last week. On the agenda: bills that put government data into more accessible, readable formats; that subject mortgage giants Fannie Mae and Freddie Mac to Freedom of Information Act requests; and that require an audit of the Federal Reserve.

These are fine ideas, but none comes close to dealing with the lack of transparency at the top of our democracy.


Although we know that Russia tried to help put President Trump in power through a sophisticated computer hacking operation, and that the FBI has information suggesting some of Trump's campaign operatives may have collaborated with the Russians, we still do not have even the most basic information about the president’s or the Trump Organization’s financial dealings with the Russians or with any other foreign power.

The reason for this is simple — the president has not released his tax returns. He doesn't have to; there's no law forcing his hand, although every other president since the 1970s has done so. As a candidate, Trump filled out Form 278, which is a financial disclosure statement that presidents, candidates for president and other senior executive branch officials must file annually. But Form 278 alone, without Trump's tax returns and given his refusal to truly divest from his businesses, isn't sufficient to do the disclosure job.

All high-ranking officials except the president are subject to criminal conflict of interest prosecution.

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Many of the Trump Organization entities are set up so as not to pay their own corporate income tax but to pass through profits and losses to their owners, principally President Trump. Information about the profits and losses, including debt payments, of Trump corporations and limited liability companies is included on his personal tax returns. If there were, say, several million dollars a year in interest paid each year on a loan from an opaque Russian entity financing Trump Organization businesses, that information would have to be disclosed on his tax return in order for him to deduct the interest.

Very little of such Trump Organization information is captured by Form 278. This is because it has nothing to do with taxes, it reports only the personal assets, income and liabilities of whoever must fill it out, not of the entities that he or she controls.

In the president's case, even if he could take a tax deduction for interest payments by a Trump-controlled corporation or LLC to a foreign lender, he would not have to disclose this on his Form 278 because it is not "his" loan. Unless the loan is set up so that he is personally liable (and we know from past reporting on his business dealings he does not like to do that), the loan does not have to be disclosed. (The interest paid may reduce the overall earnings reported, but the amount of the loan and the identity of the lender would remain concealed.)

Form 278 also does not require disclosure of the identities of other business partners in Trump's corporations and LLCs. If there is capital infusion in a Trump business from a foreign sovereign wealth fund, for instance, you won't find that on Form 278 because technically it is not a direct payment to Trump but rather to a corporate entity controlled by Trump.

Congress can amend the statute governing Form 278 to require more disclosure of debts, capital infusions and revenues of corporations, LLCs and other entities controlled by high-ranking office holders.

We are entitled to know, for example, about any foreign payments that have been flowing to or from senior officials, including the president, who are responsible for our intelligence operations and national defense. We are similarly entitled to information about foreign money going to or from officials who negotiate trade agreements, whether the president or the U.S. Trade Representative.

It may not seem necessary to extend the collection of this information beyond the president, since all other high-ranking officials are subject to criminal conflict of interest prosecution. Those laws mean that such officials tend to sell any controlling corporate interests that might relate to their duties when they enter public service. Nonetheless, it would be better if Form 278 expressly ask them as well as the president to disclose such interests.

With regard to President Trump, Russian money is what we are most concerned about now, but we also want to know more about his financial connections in the Middle East and China as well.

In addition to amending Form 278, Congress should use its subpoena powers to get the president's tax returns and to demand other relevant information from the Trump Organization. This cannot wait. If anyone helped the Russians conduct hostile spying activities in the United States to disrupt the 2016 election, that person probably committed treason. Although we should assume that the president had nothing to do with such a conspiracy unless proven otherwise, we do have a right to know about his business dealings abroad, including his possible dealings in the very same country that took such extraordinary measures to harm us.

Richard W. Painter, a law professor at the University of Minnesota, was chief White House ethics lawyer under President George W. Bush from 2005 to 2007.

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